National Health Act 1953 - Amendment determination under section 85B - price determinations and special patient contributions (No. PB 110 of 2009)

Administered by Department of Health, Disability and Ageing

Legislation au F2009L04253 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

INSTRUMENT NUMBER PB 110 OF 2009

NATIONAL HEALTH ACT 1953

AMENDMENT DETERMINATION UNDER SECTION 85B

 

Purpose and operation

Part VII of the National Health Act 1953 (the Act) is the legislative basis of the Pharmaceutical Benefits Scheme (PBS) by which the Commonwealth provides reliable, timely, and affordable access to a wide range of medicines for all Australians.

Subsection 85(1) provides that benefits are to be provided by the Commonwealth in accordance with Part VII in respect of pharmaceutical benefits.

Drugs and medicinal preparations to which Part VII applies are (with the exception of some medicinal preparations with additives) declared by the Minister by legislative instrument to be so under subsection 85(2). These are listed drugs as defined in subsection 84(1). 

The Minister by legislative instrument can determine the form or forms of a listed drug by reference to strength, type of unit, size of unit or otherwise (subsection 85(3)); the manner of administration of the form of the listed drug so determined (subsection 85(5)); and a brand of the pharmaceutical item (defined in subsection 84(1)) that has the listed drug in that form with that manner of administration (subsection 85(6)).  These determinations govern what constitutes the pharmaceutical benefit (defined in subsection 84(1)) under Part VII of the Act.  Under section 84AF, the Minister may determine a responsible person for a brand of a pharmaceutical item.

Subsection 85B(1) provides that the section applies if the Minister and the responsible person for a brand of pharmaceutical item have been unable to make a price agreement under section 85AD on an amount that is to be taken to be the appropriate maximum price for sales of the brand of pharmaceutical item to approved pharmacists.

Under subsection 85B(2), the Minister may by legislative instrument determine, by reference to a quantity or number of units of a pharmaceutical item, the amount that is taken to be the appropriated maximum price for sales of the brand of the pharmaceutical item to pharmacists.

Under subsection 85B(3), the Minister may by legislative instrument determine, by reference to a quantity or number of units, the amount that is taken to be the price claimed by the responsible person as the responsible person’s price for sales of the brand of the pharmaceutical item to approved pharmacists.

Subsection 85B(4) provides the special patient contribution for the brand of the pharmaceutical item is the difference between the “responsible person’s Commonwealth price” and the “Commonwealth price” for the brand of the pharmaceutical item.  Subsection 85(6) defines these terms to the effect that the Special Patient Contribution is the difference between the Commonwealth price (worked out in accordance with the determination of the Pharmaceutical Benefits Remuneration Tribunal under subsection 98B(1)) based on the amount determined under subsection 85B(2) and what would be the Commonwealth price based on the amount determined under subsection 85B(3).

Under subsection 85B(5), the Minister having made a determination under subsection 85B(3) may by legislative instrument determine the circumstances in which the Commonwealth is to pay the special patient contribution for the brand of the pharmaceutical item.

This legislative instrument in giving effect to recommendations of the Pharmaceutical Benefits Advisory Committee (PBAC) amends the determination under section 85B made by legislative instrument number PB 118 of 2008 which came into effect on 1 December 2008. 

The amendment provides for changes to the price claimed (claimed price) by the responsible person for a brand of a pharmaceutical item and the Commonwealth agreed price (determined price) for the pharmaceutical item.  The difference between the price claimed by the responsible person and the determined price forms the basis of a special patient contribution.

The amendment also provides for the deletion of brands of pharmaceutical items where a special patient contribution no longer applies.

The amendments are set out in the items of Schedule 1 to the instrument.

A provision-by-provision description of the instrument is contained in the Attachment.

This instrument, expressed to commence on 1 December 2009, was made on 12 November 2009.

 

Consultations

This instrument affects certain responsible persons with medicines listed on the PBS.  If the Minister and responsible person cannot enter into a price agreement, consultation occurs between the responsible person and the Commonwealth and thereafter the Minister determines the price in relation to the relevant brand of pharmaceutical item and determines the price claimed by the responsible person as the responsible person's price for sales of the brand of pharmaceutical item to approved pharmacists.

 


ATTACHMENT

Paragraph 1: provides that this instrument commences on 1 December 2009.

Paragraph 2: provides that Schedule 1 amends PB 118 of 2008.

Schedule 1: provides for the following amendments:

 

SCHEDULE 1

Brands with an increased brand premium

Allopurinol

Tablet 100 mg

Zyloprim

 

Tablet 300 mg

Zyloprim

Betamethasone

Cream 200 micrograms (as valerate) per g, 100 g

Betnovate 1/5

 

Cream 500 micrograms (as valerate) per g, 15 g

Betnovate 1/2

 

Ointment 500 micrograms (as valerate) per g, 15 g

Betnovate 1/2

Digoxin

Tablet 62.5 micrograms

Lanoxin-PG

 

Tablet 250 micrograms

Lanoxin

Glyceryl Trinitrate

Tablets 600 micrograms, 100

Anginine Stabilised

Hydrocortisone

Cream containing hydrocortisone acetate 10 mg per g, 30 g

Sigmacort

 

Cream containing hydrocortisone acetate 10 mg per g, 50 g

Sigmacort

 

Ointment containing hydrocortisone acetate
10 mg per g, 30 g

Sigmacort

 

Ointment containing hydrocortisone acetate
10 mg per g, 50 g

Sigmacort

Levonorgestrel with Ethinyloestradiol

Tablets 150 micrograms-30 micrograms, 21

Pack containing 21 tablets 150 micrograms-
30 micrograms and 7 inert tablets

Microgynon 30

Microgynon 30 ED

 

Pack containing 6 tablets 50 micrograms-
30 micrograms, 5 tablets 75 micrograms-
40 micrograms, 10 tablets 125 micrograms-
30 micrograms and 7 inert tablets

Triquilar ED

Minocycline

Tablet 50 mg (as hydrochloride)

Minomycin-50

Omeprazole

Tablet 20 mg (as magnesium)

Losec Tablets

Ondansetron

I.V. injection 4 mg (as hydrochloride dihydrate) in
2 mL

Zofran

 

I.V. injection 8 mg (as hydrochloride dihydrate) in
4 mL

Zofran

Oxazepam

Tablet 15 mg

Serepax

 

Tablet 30 mg

Serepax

Pravastatin

Tablet containing pravastatin sodium
20 mg

Pravachol

 

Tablet containing pravastatin sodium

80 mg

Pravachol

Quinapril

Tablet 20 mg (as hydrochloride)

Accupril

Thyroxine

Tablet containing 50 micrograms anhydrous thyroxine sodium

Oroxine


 

Tablet containing 75 micrograms anhydrous thyroxine sodium

Oroxine

 

Tablet containing 100 micrograms anhydrous thyroxine sodium

Oroxine

 

Tablet containing 200 micrograms anhydrous thyroxine sodium

Oroxine

Trandolapril

Capsule 500 micrograms

Gopten

 

Capsule 1 mg

Gopten

 

Capsule 2 mg

Gopten

 

Capsule 4 mg

Gopten

Triamcinolone

Cream containing triamcinolone acetonide
200 micrograms per g, 100 g

Aristocort 0.02%

 

Ointment containing triamcinolone acetonide
200 micrograms per g, 100 g

Aristocort 0.02%

Trimethoprim

Tablet 300 mg

Triprim

Trimethoprim with sulfamethoxazole

Tablet 160 mg-800 mg

Paediatric oral suspension 40 mg-200 mg per 5 mL, 100 mL

Septrin Forte

Septrin

Brands with a price change but no change in brand premium

Pravastatin

Tablet containing pravastatin sodium 10 mg

Pravachol

 

Tablet containing pravastatin sodium 40 mg

Pravachol

Quinapril

Tablet 5 mg (as hydrochloride)

Accupril

 

Tablet 10 mg (as hydrochloride)

Accupril

Brands which no longer have a brand premium

Cefotaxime

Powder for injection 1 g (as sodium)

Cefotaxime Sandoz

 

Powder for injection 2 g (as sodium)

Cefotaxime Sandoz

Cimetidine

Tablet 200 mg

Tagamet

Potassium Chloride with Potassium Bicarbonate

Tablet, effervescent, 14 mmol potassium and 8 mmol chloride

Chlorvescent

Quinine

Tablet containing quinine sulfate 300 mg

Quinate

 

Overview

The National Health Act 1953 was enacted to establish a framework for providing reliable, timely, and affordable access to a wide range of medicines for all Australians through the Pharmaceutical Benefits Scheme (PBS). This Act addresses the need for a coordinated and efficient system to manage the availability and pricing of pharmaceutical products. The policy objective of the Act is to ensure that all Australians have access to necessary medications at a reasonable cost. The amendments to the Act, as detailed in the explanatory statement, focus on adjusting the prices of certain pharmaceutical items listed under the PBS to ensure affordability while also managing the costs associated with the provision of these medications. The amendments are determined by the Minister for Health under the legislative authority provided by the Act, reflecting recommendations from the Pharmaceutical Benefits Advisory Committee. The changes, which include adjustments to the brand premiums and prices of specific pharmaceutical items, aim to balance the interests of patients, pharmaceutical companies, and the Commonwealth government.

Scope and Application

The National Health Act 1953 Amendment Determination under section 85B pertains to the Pharmaceutical Benefits Scheme (PBS), which is the legislative framework for providing affordable access to a range of medicines in Australia. This particular amendment affects the determination of prices for certain brands of pharmaceutical items listed on the PBS, particularly when the Minister and the responsible person cannot agree on a price. Under such circumstances, the Minister is empowered to make a legislative determination of the appropriate maximum price for sales of these brands to approved pharmacists. This instrument, which came into effect on 1 December 2009, amends previous determinations and specifies the prices for various brands of medications, including Allopurinol, Betamethasone, Digoxin, and others, by adjusting the price claimed by the responsible person and the Commonwealth agreed price. Additionally, it removes certain brands from the special patient contribution category where it no longer applies. This amendment applies nationally, impacting pharmaceutical companies and other responsible persons who have listed drugs on the PBS. The legislative instrument can extend or restrict its application through subordinate instruments, as defined by the Pharmaceutical Benefits Remuneration Tribunal.

Key Provisions

The key operative sections of this legislation, which pertains to amendments of the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953, include the amendments to the determinations under section 85B (paragraphs 1 and 2). These sections pertain to the circumstances under which the Minister can determine the maximum price for sales of a brand of pharmaceutical item to pharmacists and the special patient contribution for the brand of pharmaceutical item. Specifically, these sections allow the Minister to determine the maximum price and special patient contribution when an agreement cannot be reached between the Minister and the responsible person for the brand of pharmaceutical item (subsections 85B(2) and 85B(3)). The special patient contribution is the difference between the Commonwealth price and what would be the Commonwealth price based on the amount determined under subsection 85B(3) (subsection 85B(4)). This legislation imposes certain obligations and requirements on parties involved in the PBS. The Minister is required to make determinations regarding the form, administration, and brand of listed drugs, as well as the appropriate maximum price and special patient contribution, when an agreement cannot be reached with the responsible person. The responsible person, in turn, must adhere to the price determinations made by the Minister. Additionally, the Pharmaceutical Benefits Advisory Committee (PBAC) plays a role in providing recommendations to the Minister for amendments to the PBS, as seen in the amendments made under this legislation. There are no explicit offences, penalties, or civil/criminal consequences stated in this legislation for breaches of the provisions. However, the Minister's determinations under section 85B carry significant implications for the pricing and patient contributions for pharmaceutical items. Non-compliance with these determinations by the responsible person could potentially result in disputes or legal challenges, which may need to be resolved through the appropriate legal channels. The maximum penalties for breaches of the National Health Act 1953 are not specified in this legislation, but they could include fines or other penalties as determined by the relevant courts or tribunals.

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